Thirty five days ago the GOP held control of both houses of Congress and the Presidency and yet an ill-advised policy based on ignorance was allowed to hold 800,000 federal works hostage. How did this happen? Majority Leader McConnell, Leader Schumer, Speaker Ryan and Minority Leader Pelosi all agreed just before Christmas to extend a spending bill for a few weeks enabling the federal government to keep running while discussions were pursued on a Border Wall. POTUS went along with this plan and told Majority Leader McConnell he would sign the extension bill. Yet, that evening POTUS started listening to commentators from his far right base – changed his mind and demanded funding of $5.7 billion for a wall or he would as he said a week earlier ‘take pride in shutting down the government’. The Border Wall idea has no solid evidence to support that it would work to stem the tide of drugs of which 90 % come through ports of entry, drug leaders and gangs who fly over the border. PBS sent a reporter to the border near Nogales, Arizona to gather real data on what was actually happening at the border. He found that people on the border did not want a huge wall except for sections of see-through barriers in cities, yet wanted more border police, more access roads and surveillance technology. Speaker Pelosi made an excellent point in her press conference today, after POTUS caved when it was obvious the shutdown was causing real harm to many Americans, plus federal workers and their families. She declared, ‘we support more border security measures, that are evidence based,’

Her focus on evidence based policy was music to our ears. When was the last time during this GOP administration have we heard that policy would be ‘evidence based’ (with real facts not made up ‘alternative facts’)? The EPA has moved quickly to shift policy making processes to not use scientific based reports or data in making policy decisions. Immigration policy is based on scapegoating of Muslims, Mexicans, and Central Americans instead of the facts. The facts are that new businesses are twice as likely to be started by immigrants, that when the Mexican economy thrived cross border immigration fell dramatically and that majority of immigrants fill jobs that most American workers don’t want to do. Canada has looked at their trend of an aging population and declining workforce. To build the size and skills of their labor force for the future they are welcoming immigrants – we should be doing the same thing. Our population is aging quickly, so without an immigrant influx of entrepreneurs and workforce we will be faced with a stagnant economy looking much like Japan’s.

The effectiveness of modern medicine was revolutionized when evidenced based medical practices and research was implemented as a standard clinical practice in the 1960s. Businesses today use Big Data analysis, models, forecasting and innovate new products based on data, research and analysis before making investments. The dramatic increase in our standard of living is based on innovative processes in universities, businesses and financial services all insisting on ‘getting the data’ first before making proposals or investments.

We should accept nothing less than evidence based government. We are behind by 20 years on combating the effects of scientifically proven climate change. Our future will depend on making intelligent decisions based on evidence to implement sound policies and investments to ensure the existence of humanity.

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us. Please right click on images to see them larger in a separate tab. Click on the Index Topic Name at the beginning of each post to see more posts on that topic on PC or Laptop.)

Photo: heartlandhospice.com

Midwest farmers are declaring bankruptcy at a rate not seen since the Great Recession. As prices for corn, soybeans, milk and corn decline to decade lows, the Minneapolis Federal Reserve reports that Chapter 12 bankruptcy filings in 5 states of the Ninth District.

The Federal Reserve notes that based on the level of bankruptcies and the trajectory of the increase that bankruptcies will only increase. The government shutdown is exacerbating farmland pain. The Trump administration announced last summer $12 billion in farmer subsidies. But, because of the shutdown many farmers applying for subsidies and loans to plan for spring planting are not receiving the money they need. Many farmers and agriculture businesses are affected by the Department of Agriculture shutdown versus coastal states as shown below.

Source: Axios – 1/12/19

China turned to Russia and Brazil for soybeans in particular in the 4th Qtr of last year. US sales to China dropped to almost zero. As a negotiating tactic, China last week did pledge to buy more soybeans as traders in Chicago noted last week an increase in sales orders. However, when China switched purchases to major suppliers last year it will be difficult for US farmers to unhook those deals already in place. As one farm owner noted, “ it just seems like it’s one thing after another, over and over.”

Heartland challenges have actually been going on for years even before the Great Recession with the loss of millions of manufacturing jobs since China joined the WTO in 2000. The rural regions of the country have seen their wages grow at half the rate of metro areas. The opioid epidemic has cost thousands of young workers future careers, unemployment is twice what it is in the East and West. The digital internet infrastructure in rural areas is quite often at analog rates 4 times slower than broad band. Companies are at a disadvantage versus their metro competitors with slow bandwidth. Rural region hospitals are closing at an increasing rate leaving many rural people with hundred mile or more drives to the nearest emergency room. Life expectancy in Mississippi is the same as Libya. Heartland America has been left out the metro mainstream economy for the past 20 years. Our post – The Hallowing Out of Heartland America shows how rural regions have fallen behind in many infrastructure areas including: healthcare, Internet bandwidth, jobs, education with limited upward mobility for young people.

Next Steps:

The Heartland Venture Marshall Plan is similar in concept as the Marshall Plan deployed by the U.S. to rebuild the infrastructure of Europe after WWII, but instead of a government bureaucracy the Silicon Valley style innovation venture model is used. Venture development is designed to start small, build on successful prototypes and use multiple sources of funding to gain as much support as fast as possible to make the venture a success. Failure is part of the success fast, try several prototypes, do it, tweak it, try it again until it works or achieves the goals we set for the venture.

Here is a summary of the idea from our post of September
2017:

“We propose
building a startup
non-government organization. We are recommending a difference approach by the
Federal government to act as an investor in a non-government organization
called a Heartland Development Center.
An HDC acts as a central hub of critical services and infrastructure
development while providing a continuous innovation system. The Heartland Development Center acts as a
catalyst creating an innovation ecosystem to jumpstart local economics and
social structures. HDCs would focus on all the key issues that a region
needs to address to rebuild their economy and people’s lives: business
formation, education and training, digital infrastructure, affordable housing,
engaged local innovation media and health care.

The Federal government would seed the financing of these NGOs in key regions with additional funding from local and state governments, and major corporations who would benefit from the newly available job force tuned to their needs. HDCs would be ‘startup’ organizations installed at Land Grant universities bringing in leaders in their respective fields – ie. business formation – Y Incubator, preventive health – Cleveland Clinic, or training – Opportunity@Work as contractors to the HDC. These NGOs would establish continuously renewing innovation processes to stay in touch with their citizen – customers and businesses. Administration services would all be contracted using cloud software services for HR, Payroll, Training, Benefits and other internal systems to keep costs down. The HDC startups would be piloted in 3 non metro areas, where they would tune their business and socio economic models for maximum impact, then use those working models to implement HDCs in 25 or more other key regions for 5 – 10 years.”

There is one indicator of the desperation that many rural people feel is the fact that the opioid epidemic has a 50 % greater incidence in the Heartland than in our metro or coastal cities. We need to be building bridges through programs like the Heartland Venture Marshall Plan between our coasts and the inland empire to bring together our people developing consensus and shared experiences. Each HDC would be staffed by a equal mix of apprentice and college graduates from local rural education systems and metro university graduates. They would comprise a ‘Heartland Service Corp’ modeled on the AmeriCorp program with a benefit of complete forgiveness of student debt for two to four years of service depending on the debt balance. We would be building shared experiences of our young people to bridge the gap between inland and coastal cultures. These young people can innovate new opportunities to create an economic future that works for all.

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us. Please right click on images to see them larger in a separate tab. Click on the Index Topic Name at the beginning of each post to see more posts on that topic on PC or Laptop.)

Image: takemyhandcoaching.com

Everyone has a mother and father (even if they are not living
with them now). Many of us have brothers,
sisters, aunts, uncles, grandfathers and grandmothers. How about looking at local, state and federal
government policies and laws through the eyes of our families. Does this
healthcare insurance make sense for families?
Does it provide for services, drugs and care from birth to death? How can we build families as a unit of
government services?

Families are really the basic unit of our communities. A household is in an apartment, or home with
a set of family members – as those members define their household. For many there are multiple generations in a
household, aunts, uncles, grandpa and grandma.
Can we start with family as an economic unit too. How do we support those who have jobs in the
household? Can we support multiple
family members having jobs? For example with child care so that Moms can work
if they want to. Can we have more women
friendly corporate policies such that a women can move from home to the work
world and back without losing pay or career opportunities. Why not have paid parental leave like most
developed countries of the world?

Children in the household need an education in the household to survive in this world. Why not make pre kinder programs available for all families not just wealthy ones. Why not offer public education that is equal across communities not just rich ones getting the good teachers and supplies? Why not offer a college education or high quality apprenticeship programs to all children regardless of community at no cost to the family or limited cost. When are we going to invest in our children to the level that we did in the 1970s when states spent 3 or 4 times what they spend now secondary and higher education.

When a household job holder is out of work what
happens? How can we support that person
get another job, offer health insurance when they need it between jobs as no
additional cost. When will we make companies that layoff workers do so in an
equitable way along with manager and executive layoffs? How do we get equitable pay for employees
that is at a livable wage instead of 300 % less than executive pay. In the 1950s executive pay was 50 % higher
than the average worker, it worked then why not now. Instead of allowing corporations to take the
money they make off the hard work of employees, and funded by customers to
throw stock buyback money down the drain – take those funds and fund equal education
for all or healthcare for all.

Family time together needs to be supported, in Europe they have the full month of August off to be together with their families or friends. Instead, US workers work the most number of hours in a year of all workers in the world. Germany does fine with an economy that provides a good standard of living for all workers and they have 5 weeks off each year.

Today we have the highest level of wealth concentration since 1929, we know what happened after that year, the stock market crashed, companies went of business, unemployment was over 20 %, many people starved. Unless, we take dramatic steps to share the benefits of our economy for all, it will crash again, causing great pain and suffering to many for 5 to 10 years as the economy rebalances wealth and reverts to the mean of wealth for the past 88 years. Throughout history, societies become prosperous, the rich take control of government and resources and eventually those that are left out revolt or the economic model becomes too top heavy to work and deflation, depression and decline takes place. Then, as wealth rebalances the industrious are rewarded again and the society begins to grow again on a solid foundation. That foundation is the family. There is another benefit to putting families first. We are actually all part of the same family of humanity, maybe when we put the focus on families we will treat each other with respect, understanding and civility.

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab. Click on the Index Topic Name at the beginning of each post to see more posts on that topic on PC or Laptop.)

Photo: wikipedia.org

To: CEOs – S & P – 500

From: The Progressive Ensign

Subject: Stock Buybacks Are Out of Control

Date: November 5, 2018

Congratulations, this past quarter you knocked earnings out of the park, profits were higher in particular, though revenues lower and you did well by raising stock prices to new highs in September via stock buybacks.

Source: Standard & Poors – 11/4/18

Ok, you did well on stock compensation too with soaring stock prices. You can take that trip to Cancun, buy a boat and a villa for extended stays. You have worked hard, your team has gone all out to make your companies successful, and worked harder. Remember, while you were traveling and making decisions on sales, financing, product development and marketing they are actually designing, building, shipping, selling and supporting your products and services.

Next, you have not been making the investments in capital equipment , R & D and innovation to move companies along and be prepared for more overseas competition or increase productivity. Thanks for moving wages higher for less than high school educated workers recently they still aren’t enough to keep up with inflation though. If you can increase productivity we can give workers raises without it hitting the bottom line an increasing cost, and earning would be stabilized or even get better. You wouldn’t need to use financial gimmicks like stock buy backs to take stock off the market, and goose the price so earnings look better on a per share basis. Between 2010 and 2017 S & P companies spent 51 % of their operating earnings on stock buy backs. That’s money just hyping stock nothing else. Note that business investment is continuing to decline with lower highs and investments flat since 1998.

Sources: The Wall Street Journal, The Daily Shot – 11/5/18

Your joy ride on $1 trillion of stock buybacks needs to end. We want to see a plan by the end of the month on how you will use that $1 trillion dollars in meaningful long term ways such as raising wages, job training, purchasing new equipment and systems, and innovating new products. You are basically taking away the future of your workers and the country for your short term gain. Show by quarter how you will implement the plan and get your businesses actually growing again (in real dollars not financial gimmicks), workers supporting their families in sustainable lifestyle and making America stronger.

P.S. By the way, it is time to end your constant borrowing, rates are going up, and you spent most of the money on stock buybacks or other goodies not investing in the company. You are mortgaging the future of the business by taking on a record amount of debt. Please submit a plan for retiring this debt as part of your financial plan for investing in the company by the end of the month.

P.P.S. For those of you ( a minority) who are not doing stock buybacks, thank you, and you who are spending on capex and raising wages thanks a lot! Just submit a set of graphs showing your investments so we can show the other CEOs how it is done – as a best practice.

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab. Click on the Index Topic Name at the beginning of each post to see more posts on that topic on PC or Laptop.)

Image: YourLittlePlanet.jpg

A recent survey by the Public Religion Research Institute, showed that nearly 70 % of all Americans agreed that the dignity of the presidency had been damaged by POTUS. Even, GOP members agreed with this finding by 40 %. Another point most Americans agree on is that the President should be more consistent with previous presidents by a wide margin of 69 %, the majority of GOP members agreed by 57 %.

We look to our Chief Executive to set the tone for national discourse on critical issues facing the country – not abusive language, mocking, and divisive rhetoric most of which is untrue. It is heartening to see that most Americans see what is happening today as being out of bounds in the dignity and behavior of the present Chief Executive. Americans still have respect, and support a President who is seen as fair, truthful and exemplifying dignity.

If we can’t get the building of civil national discourse going at the top – let’s start building from the grass roots up. The following observations on building service in our lives is attributed to Mother Teresa:

“If you are kind, people may accuse you of selfish, ulterior motives. Be kind anyway, What you spend years building, some could destroy overnight. Build anyway. The good you do today, people will often forget tomorrow. Do good anyway. Give the world the best you have, and it may never be enough. Give the world the best you have got anyway. You see, in the final analysis it is between you and your God…anyway.”

Over 80 % of Americans believe in God or some higher spiritual force. Maybe we start with the universal understanding that as spirit beings we need to be building our communities, families and relationships with each other.

Let’s start building regardless of whether we receive a positive response in return or our motives are suspected. The world needs nothing less than the best we have to give today to bend the arc of universal justice toward equality and peace.

The day after that EPA announces relaxation of coal burning regulations scientists announced the first time in all recorded history the ‘last ice sea’ north of Greenland has thawed twice! ­This assumption that ‘last ice sea’ would not thaw due to climate warming is no longer proving to be true. One scientist described the iconic ice thawing discovery as ‘scary’.

Sources: The Polar Science Center, The Guardian – 8/21/18

At the same time, global warming is causing the seas to rise by 8 inches since 1900 of which 3 inches was since 1993. Scientists predict the sea level will rise another 3 to 7 inches by 2030. Today, rising sea levels are sending property values in low tidal areas spiraling down. University of Colorado and Penn State University researchers found that homes within just one foot of being flooded from a sea level rise were selling at a 14.7 % discount compared to homes on higher ground. Analysts have totaled property price losses since 2005 for Charleston at $265 million and Miami- Dade County at $465 million. Of course this is just the tip of the iceberg when considering all the coastal properties in the U.S. – losses are in the billions of dollars.

California has experienced the highest number and most acreage of wildfires in its history. Japan sweltered under hot July summer temperatures making new records. During the summer large areas of heat pressure or heat domes scattered around the hemisphere led to the sweltering temperatures. The Canadian Broadcasting Corporation notes the heat is to blame for at least 54 deaths in southern Quebec, near Montreal, which sweated under record high temperatures. The worldwide list of new high temperatures goes on and on. The chart below shows extremely hot temperatures worldwide in a model at 2 meters above ground.

Sources: University of Maine, The Washington Post – 7/5/18

The relaxation of Obama administration clean air restrictions would possibly kill from 470 to 1,400 people per year the EPA admits. The policy shift would move enforcement responsibility to the states, and allow them to relax regulations on coal burning plants even when installing new equipment. Utilities would be allowed to use old standards when installing new equipment without having to meet higher air quality regulations. The Obama era policies were never enforced because the Supreme Court found in favor of the states who sued to overturn the tighter regulations.

Next Steps:

Enough is enough, the federal government is here to protect American lives not kill more people as a result of policy. The government’s position makes no sense, it’s time we as citizens take a stand.

As we have said in a previous post:

“we may need to look to how to make duty more of a core value in our culture and in particular business culture. As we have observed our country is essentially run by Corporate Nation States, they must change their attitude, behavior and operating practices focused on their duty to all the people not just their executives and customers. Everything a corporation does in some way impacts the Common Good. We are the people these corporations serve, and we should expect nothing less than socially responsible behavior from the executives running these huge Corporate Nation States.”

We would like the executives of these coal companies to think about the people that will get ill or die because they wanted to make more money and be ‘efficient and affordable’. What if their daughter died? How would they feel. It seems that we are back to the point we made in last week’s Common Good post we ‘use people, and love things (money)’. This policy is dead wrong, and should never be implemented. Instead, these corporations should be coming to us with proposals on how to save people’s lives and speed up the process of reducing climate warming. Maybe, these executives need to look themselves in the mirror and ask ‘who am I serving?’. Time is running out, people are being killed in the heat, economies are being destroyed. All these forces will cause civil conflict unless we act now to reverse the course of climate warming, before it is too late.

We all have a mother and father, and may have brothers and sisters. We come into the world born of our mother with a bonding to her, and if all goes well the father is there to raise us too. We can all agree that families are a priority – when things get tough our families come first.

Bo Lotzoff, philosopher and counselor helping many prisoners and poor people turnaround their lives, observed about American society that we ‘love things and use people’. It should be the other way around, ‘love people and use things’. Think about this insight. When we look objectively at what has happened to family life in the past 30 years, the slice of time devoted to family versus work has progressed in reality to not much time, or invested engagement by the working parent.

In Silicon Valley, the heart of technology innovation world-wide, it is the standard expectation for most workers at top companies to be at work until 8 or 9pm, just leaving barely enough time for fathers or mothers to read a story and tuck their children into bed. Management expects knowledge workers to check for text messages at least 19 hours a day and email before coming into the office, responding to work requests on weekends too. Even, on vacations, if project reviews are planned workers are expected to phone in for the key meetings and ‘stay on top’ of what is happening. When global conference calls are involved, the calls may start at 6am to Germany and continue to 7 or 8 pm to Japan or China. What all this connectedness means is that the company owns the mind and emotions of the worker 24 by 7. At one startup ‘all hands’ meeting just prior to the Christmas holiday the CEO thanked everyone for their hard work over the past year and declared, “have a fun Christmas or holiday rest for a day, then let’s make our numbers!” He made the statement kind of in just but half serious, the workers got his point, see your families and friends but stay connected 24 by 7.

Corporate life is destroying family life and our connectedness as a community. Being totally connected to the corporation is more important if we want to maintain our standard of living is the message. Corporations are using people and loving things (sounds like high tech).

Nourishing, sustaining and building stronger families would do a lot for solving our societal and economic issues. Crime would go down as young men who are left to live on the streets would be learning skills, playing a team sport or having a family supporting his life, and where after school programs were funded and staffed well. Groups like Thread, in Baltimore actually use the family structure with Parents and Grandparent surrogates to support youth in poor parts of the city where there may be only one parent and that parent is not home much of the time working two or three jobs to support the family. Today we are missing millions of our youth to crime, opioids and dead end jobs that could be active productive members of our labor force. Our labor force is declining with the aging of baby boomers, we need all the paycheck workers we can to support our aging population and for young workers to save for their futures.

So, let’s look at the policies of our federal government using the family yardstick which most people right or left, Republican or Democrat agree:

Family Separation – recently we saw that there was consensus that children should be kept with their parents – even immigrant children

Health Insurance – a Pew Research survey showed that 58 % of all Americans believed that every person should have affordable health insurance for which the government is responsible

Childhood Health Insurance Program (CHIP) – most Senator and Congressmen agreed and renewed the CHIP bill to protect children caught between Medicaid and being too poor to afford an individual health insurance plan in this past December’s spending bill.

Flexible Job Definition – more social and family counselors see a need for men and women to have flexible time jobs meaning that when a family emergency comes up like an illness or doctor appointment the worker can take time off and make the appointment without repercussions in job performance, salary or benefits.

Parental Leave – Federal law of 1997 requires private employers to provide maternity leave up to 12 weeks of unpaid job-protected parental leave to bond with a new child within one year of birth, adoption, or foster care placement (parental leave). The US is the only country in the developed world that does not have paid leave for parents.

Wages – real wages (after inflation) for the 80 % of workers in the U.S. have basically been stagnant for the last 30 years. Instead, corporate executives use excess profits to juice their stock prices with stock buybacks instead of raising wages. They are wasting nearly $810 billion that Goldman Sachs estimates is being spent in 2018 on stock buy backs. That $810 billion could go a long way to providing decent wages for workers. Analysts estimate the S & P 500 index is at least 20 % higher from what the prices of company stocks would be without stock buybacks. The reality is that workers and their families suffer having to work two or three jobs because of the greed of executive management.

We could add to the list, our point is made, when we have a consensus that families need to be placed as the first priority, not the second or third or thirty-fifth, then our legislative priorities are clear. Other countries seem to make a thriving economy and support of families work. Germany has paid parental leave, a net export economy, good wages, employee councils and at least 4 weeks of paid vacation for most employees. Most German families feel secure. This author asked a co-worker from Germany if he considered working in the U.S., he noted, “I would get sharper, get closer to engineering and innovation, yet, there is no real recognition of families, In Germany, I have paid leave for a new child, four weeks of vacation every year, a good guaranteed retirement program, health insurance and I participate in our employee council…I don’t want to live under constant stress in America.”

Families are the basic economic building block of our country. When corporations take control of our government and run our families into oblivion we all are hurt as a country. In the end corporate executives need to wake up and support family sustaining policies in their company, their management culture, wages and in Washington to build strong families. Otherwise, someday corporations will discover as is beginning to happen today, that young women having the fewest babies ever since WW II, the lowest level of family formations ever and lowest number of millennials buying homes will lead to shrinking markets, falling margins and reduced sales. We need to monitor what is happening to the health of our families to know if our societal values, economic values, government policies and corporate behavior are strengthening or weakening families.